JimPinto.com - Connections for Growth & Success™
No. 261 : 25 February 2009

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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The Invensys shuffle

Paulett Eberhart, President of Invensys Process Systems (IPS) had already changed the game significantly by moving IPS HQ from Foxboro, MA. to Dallas, TX. This seemed like her own private agenda, but apparently blessed by CEO Ulf Henriksson.

Less than a month after Paulett's abrupt and still unexplained departure, Ulf announced a BIG re-organization. Under the banner "The Industrial Automation Transformation Project", the plan was integration of IPS, Eurotherm and Wonderware into a single entity.

Within just a few days, Ulf issued another message to the troops. This seemed to pre-empt the outcome of the project and establish, through a series of 'interim' appointments, what looks like an entirely new structure for the combined businesses.

Sudipta Bhattacharya was appointed overall President of Invensys Process Systems, Wonderware and Eurotherm. After leaving SAP, Sudipta joined Wonderware about 18 months ago as "Chief Software Officer". With the sudden departure of Mike Bradley, he was made Wonderware President, and now IPS Chief. Ulf must think he's pretty good. Or else, he's just reaching for straws.

Interestingly, this information was not released to the press through the usual channels, but broadcast to the world through JimPinto.com weblogs. Shows the unexpectedness of the move, and Ulf's apparently hurried fumbling.

Meanwhile, speculation is rife on the JimPinto.com weblogs. Sudipta, Wonderware's Pankaj Mody (VP Development), Rashesh Mody (Global Product Management) and Vinay Moorthy (VP Engineering Solutions) are all from India; and a significant share of software developments are being transferred to the Invensys Development Center (IDC) in India. So turf wars and xenophobic comments are flying back and forth through anonymous weblogs.

Go read.....

Click Invensys weblogs

Click Automation majors encounter turbulence - Invensys

Click Read more in Andrew Bond's "Automation Insider"

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PAS Users Conference - "Strategize to Optimize"

The third annual PAS Users Conference will be held at South Shore Harbor Resort and Conference Center in Houston, TX. March 9-11, 2009.

The key focus will be "Strategize to Optimize" plant operations. I'll be a keynote speaker on Tuesday 10 March, and my topic is, "Operator Effectiveness Unplugged".

Another keynote speaker is John H. Lienhard, Professor Emeritus of Mechanical Engineering and History at the University of Houston. John is author and voice of the "Engines of Our Ingenuity".

The heart of the conference will be presentations given by experienced users on the topics of Operator Effectiveness, Alarm Management, Control Loop Performance, Automation Configuration Management, and High Performance HMI.

There will be several informative presentations on industry experiences, customer projects, and application benefits. In addition, the conference will feature an industry executive panel discussing a growing concern, "Knowledge Retention: Dealing With an Aging Workforce".

This conference is a great opportunity to network with fellow professionals and benefit from their experiences. Registration fees are $995. Please come.

Click PAS 2009 User Conference - Register online

Click PAS 2009 User Conference - Agenda

Click PAS 2009 User Conference - Keynote speakers

Click PAS 2009 User Conference - Presentations

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Q&A with PACE Australia

During my recent visit "down under" as keynote speaker at CITECT (Oceania) User Conference 2008, I talked with Miguel Gonzalez, Editor of PACE, who publishes my monthly column in the magazine.

Miguel published that interview in the September 2008 issue of PACE as a Q&A session which may interest you. Here are extracts:

    Q: You've said that in terms of technology today, there are basically no differences between most vendors and their products. How can they achieve differentiation?

    A: Most suppliers have hardware products and the software that goes with them. There is, however, what I call 'much of a muchness' - meaning that everybody has most of the functions. Vendors must find ways to keep ahead, to differentiate features, advantages, benefits.

    Q: One of your recent columns discussed how automation vendors' stock has declined. Why is this?

    A: The traditional American-German-British-French power is going, going, gone. In the old days everybody used to have products from those countries. But that's not the case anymore because competitors, including China, India and others, have come on the scene.

    Q: What are the next technological inflection points?

    A: Wireless makes millions of points measurable, which cannot be dealt with the way things are done now. PLCs and DCS systems are hierarchically deterministic. With millions of points deterministic systems are just not practical.

    Q: What about the wireless standard discussions?

    A: They're nonsense. This is like kids fighting because they're looking for an advantage. The discussion of standards is, in my opinion, a waste of time. Read my poem on the wireless wars.

    Q: Thousands of engineers are graduating every year in India and China while the west struggles with a skills shortage. Does this reflect how emerging countries value different skills?

    A: It's what I call "asymmetric motivation". Broadly speaking, people in India and China are looking for upward mobility. Young people in advanced countries want to be football players and movie stars, not engineers. It's a human thing; if you're hungry, you are motivated.

    Q: How has the purpose of automation evolved?

    A: The sole purpose of automation is to improve productivity. Cheaper, better, faster, with no waste and fewer human (less labor). Whoever makes things cheaper, faster, better wins. And there will be many new winners.

    Q: And what can we as a country do to be winners?

    A: Knowledge and innovation. Do something that nobody else has done. It requires new thinking.

    Q: What was the last automation news that surprised you?

    A: When I heard Citect say [at the Citect CONNECTS User Conference at Port Douglas in August] that they had done 500,000 I/O points and were considering one million and planning for five, that was a great surprise, hearing about this scalability.

You can read the complete text of this interview (weblink below)

Click PACE Sept. 08 - Achieving differentiation in business

Click The Wild, Wacky Wireless Wars

Click Jim Pinto on "Asymmetric Motivation"

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Automation Skills Enigma

The skills shortage in America mirrors the continuing decline of interest in automation jobs. Few consider a factory job an exciting career; most just drift into it by happenstance.

The speed of change brings a mismatch of skills. Experienced people know all the old things like instruments, controllers, good wiring practices and safety procedures. But they are relatively inexpert with new digital skills like networking and communications, which comes through younger, usually lower-paid "technicians".

In the final analysis, the problem is pay. Many bright young engineers insist that in American industry at large, there isn't any shortage of engineering skills - just lack of rewards.

To circumvent the problem of skills shortages, or perhaps to reduce costs, many end-user companies simply contract whole projects to large automation suppliers or systems integrators, or even go offshore. But that merely passes the problems along, and the company loses control of vital engineering skills.

And therein lies the rub. The automation careers that are generally not held in high regards here in the US are greatly respected and even coveted in developing countries like India, S. America and the Far East. Today's global market offers easy availability of foreign engineers, with skills that match the need and willingness to fill the gaps.

Many are lulled into thinking that it's only the low-skilled jobs that are going offshore. That's simply not true. More and more high-value design and systems-engineering positions are being filled offshore, leaving little but systems integration and manual-labor to be done locally.

Let's talk solutions to this skills enigma: Recognition that the automation profession remains at the core of a countries success, the key to its prosperity.

Click Automation World (Dec. 08) - Automation Skills Enigma

Click Whither Automation Skills?

Click Automation skills shortage

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Action Instruments 1983 - INC magazine, A Call to ACTION

In November 1983 Action Instruments, the company I founded in San Diego, was 11 years old. INC magazine's Joel Kotkin wrote a major article on Action's employee involvement, participative management and humanistic approach to business. Here are extracts.

This will be nostalgic for the people who worked at Action (many are still friends). And it will interest those who have known me over the decades. And perhaps some new friends.

    Viewed merely from the balance sheet, there is nothing remarkable about Action Instruments Inc. The 11-year-old, San Diego electronics company, which last year turned a modest, $530,000 pretax profit on sales of $15 million, has never produced a major innovation, gone public, or attracted much more than local interest. Even Action's venture capitalist describes the company's best-selling product as "boring" and mired within a slow-growth, "pigpen" market.

    But, more important than any consideration of the bottom line, Action Instruments has produced the rarest of commodities - a business enterprise founded upon profoundly humanistic principles. "We are building capitalism with a heart," explains Jim Pinto, president of the company which manufactures electronic measurement and control devices. "Our competitors don't have people on their balance sheet. Ours does, and they're at the very heart of our growth."

    Long before Theory Z, Transcendental Meditation, and myriad other humanistic management theories permeated the business world, Jim Pinto was implementing his own particular capitalist vision at Action. Since founding the company in 1972, India-born Pinto has built an enterprise in which the distinction between employees and owners is blurred almost beyond recognition. Even now, as he takes a risky move into the burgeoning industrial computer field, he has no intention of deviating from the central tenets of his nonhierarchical, share-the-wealth philosophy.

    "The future of this company is to eliminate the differences between workers, managers, and owners by making them all capitalists," Pinto says, sitting below a photo of a bemused Albert Einstein. "If you own a piece, if you feel a part of this, you do everything to increase productivity. The whole ethos is based on the idea that love is a better motivator than compulsion. We don't have 'yes sahib, no sahib' relationships around here."

    At the center of Action's ethos is an almost messianic faith in the power of worker ownership. Almost from the inception of the company, Pinto has assiduously encouraged his employees to invest as much as 10% of their gross income in the purchase of Action stock. Today, almost half of the company's 285 employees are shareholders, controlling some 20% of the company, with its independent sales representatives owning an additional 8%.

    Ownership, however, constitutes only one element of Action's quest to foster worker enthusiasm and involvement. Action employees are expected to take an active interest in their investment. An "Info Center" for instance, supplies all workers with the sort of detailed information usually accorded only top managers at most companies, including weekly statements about profits, shipments, bookings, even the cause of key bottlenecks.

    When explaining the origins of the Action ethos, Pinto points to a wide range of intellectual sources, from the technological millennialism of Alvin Toffler's "Third Wave" and Marilyn Ferguson's New Age-oriented "Aquarian Conspiracy" to the hard-boiled capitalism of Ayn Rand. But, despite these conceptual trimmings, the ethos essentially reflects the experience and odyssey of James J. Pinto.

Also included (below) is a link to a Pinto interview in Oct. 2002, about 3 years after Action was acquired by Eurotherm.

Click INC Nov. 1983 - A call to Action

Click Perry Marshall Interview with Jim Pinto

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Gary Costello [garycost@rcn.com] agrees with Joe Mueller about empty proclamations that "We are No. 1!":
    "I agree with Joe. You can't make us No. 1 by declaration; rather, we have to be No. 1 by deed. 'Deed' was the ethics to our immigrant forefathers and that is where it stopped. Today, the majority seem to believe they should have 'stuff' by entitlement, as opposed to actually earning it.

    "This attitude is pervasive and permeates across the financial strata. Example: $25,000/year secretaries driving BMWs and Lexus SUVs, watching giant-screen plasma TVs and so on. Corporate execs feel they can't 'survive' on less than scores of millions per year, yet can't get their head out of their rear-ends when it comes to truly growing businesses. For every company where executive excesses are revealed, there are scores who get away with it.

    "We are now at the point where its time to pay the piper for all this make-believe economic strength. The 'good old days' are most assuredly over. The robber barons have depleted the coffers; but they still want more, so have turned to the government. They still don't get it. And the people who should never have bought homes, expensive cars and goodies galore want to keep them. They still don't get it.

    "Similar to Joe, I'm a degreed electrical engineer who just ended my last contract assignment, have virtually no prospects of any longer working in my field and thus have resigned myself to the fact that the only hope for employment I have is a menial, low-paying, labor-oriented job.

    "So much for the American Dream."

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Suzanne Lovell [suzanne.lovell@gmail.com] asks what happened to the bank bailout money:

    "My read of what happened to the initial monies distributed under TARP: The banks know exactly where the money went, they simply are not willing to give out the information. They are unwilling to do so because it was used, not as taxpayers assumed would be the case - to ease the plight of those whose money it is - but to shore up their assets and to establish 'rainy day funds'.

    "When I think too much about this my blood begins to boil but I remind myself the Feds put no reporting requirements on this money nor did they specify how it was to be used. So, if you give money without conditions to a CEO who doesn't answer to the taxpayers nor to the Federal Government, but does answer to his stockholders doesn't it makes sense, from a business perspective, that the CEO would use it to stabilize the institution?

    "I won't even get in to the ethical questions. But you can be sure I have made myself clear in emails I have written to my Representatives how I feel about their monumental blunder and what changes need to be made before any more money is given out."

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Martin Greenwood [Martin.Greenwood@iesystems.com.au] from Perth Australia writes on excessive stock trading:

    "A distorting feature of our modern economy is the high volume of share trading. There are whole armies of people, particularly in New York, London and other financial centers, who spend their working lives trading for the sake of trading.

    "Share trading is basic to the working of a capitalist economy. But we need to distinguish between 'investment' for the long haul, and short term 'trading', which is really a form of gambling. It is not part of the "real" economy. Trading does not generate any wealth. It grows not one mouthful of food, nor make a stitch of clothing, or produce 'widgets'. If you 'make money' from trading, there must be a loser somewhere; often it is the large investment funds, and hence the general public, who are the losers.

    "One of the reasons the volume of trading has increased is that it is now so much cheaper to do so - Internet trading has reduced the cost of making transactions to a trivial amount. This high rate of trading, combined with computer generated automatic 'sell' orders contributes greatly to the volatility of the stock market.

    "Government could slow down the rate of trading with negligible impact on the 'real' economy by imposing a trading tax. For example, 1% flat tax on the value of every trade would make many transactions less profitable, without impeding the ability of businesses or individuals to invest for the long term. Investment can be made more attractive than trading by refunding the trading tax if the shares are held for say 18 months.

    "Governments should also put a stop to one of the most pernicious of trading practices - short-selling. If I sell you something I do not in fact own, I commit a fraud, and the law in most countries takes a dim view of this. But hedge funds are notorious for short-selling - accelerating a downwards trend in the market. And even where there are laws against short selling, they 'borrow' shares from an investment fund to get around the requirements. It amazes me that funds will accept a small fee from someone who is actively trying to reduce the value of the asset they are borrowing!

    "My father taught me that 'Money is a medium of exchange'. Modern capitalism seems to have forgotten that truism."

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